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Good Morning! We’ve officially reached “line in the sand” time. Friday’s session was rough for both the SPY and QQQ, and ealry morning action is looking like a small gap down. Today will be an important day for the sellers to assert short term control, or risk losing momentum to the ‘buy every single dip” crowd. $430 is the first key area to watch on the SPY. Even if we gap below there, a failure to even test that level early in the week will be a sign of a potential correction. In the QQQ, $355 is a very important area to hold.
Note to new traders: Corrections, typically defined as a 5%+ decline, are a perfectly healthy and normal thing for markets to do from time to time. Swing traders love the opportunity to buy, or rebuy their favorite assets at a lower price, and day traders love the volatility a correction brings. If you’re caught in this to the long side, take a hard look at your position sizing and how much of your portfolio you’re putting into each trade.